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The man behind the curtain is turning on the PlanetLab node - Patrick Wizard of Oz Gelsinger
Intel's general counsel "mystified" and "dismayed"
INTEL'S LEGAL TEAM has donned its red gloves and is in fighting form today, as Intel Senior Vice President and General Counsel, Bruce Sewell, held a press conference in Brussels, where he claimed to be "dismayed" at the EU Commission's verdict that his firm was guilty of breaching EU antitrust laws.
With no attempts to hide the bitterness towards Intel's far smaller competitor AMD, Sewell reminded his audience just who instigated the antitrust case almost 10 years ago, on claims that if Intel wasn't regulated, AMD would die. "Eight years later, our competitor, and the sole complainant in this case is alive, healthy, and claims to be expanding its business," complained Sewell.
As the European Competition Authority declared Intel in violation of EC antitrust laws, ordering the multibillion dollar firm to change its business practices and pay a €1.06 billion fine, Sewell claimed to be "somewhat mystified" at what Intel was expected to change in terms of sales and pricing practices.
He also expressed dismay "that in a time of such acute economic turmoil the Competition Authorities have seen fit to intervene in what is by all objective measures an innovative, dynamic and competitive market."
Sewell said EU claims accusing Intel of lowering prices and doling out rebates to OEMs on the understanding they stop buying or supporting AMD products were "false." He emphatically argued that "Intel has never required a customer to agree not to buy from AMD in order to obtain a discount, nor raised a customer's prices when it decided to buy from AMD."
Sewell did say, however, that "like every company Intel competes to win as much business as it can" adding "every time Intel wins a sale, or secures preferential marketing terms, one of our competitors loses out on that sale or marketing relationship," something he referred to as "the essence of true competition."
Regulations, said Sewell, "should not prevent one company, no matter how large that company is, from offering discounts or providing incentives." He said Intel offered customers incentives to purchase its products, but that those incentives were "matched by AMD at various times in the past."
Sewell categorically denied any cash pay offs to OEMs and said that "at no time were the discounts [offered to OEMs as incentives] below cost."
Painting OEMs as the poor victims of an Intel crime was ridiculous, said Sewell, who claimed OEMs had been the ones to approach Chipzilla in the first place asking for rebates and incentives to buy their products over AMD's.
Intel is apparently also outraged the EU chose to rely on what Sewell called "hearsay" to convict the firm, rather than what Intel reckons is "sworn evidence" contradicting its guilt. He also asked the question, "can rebates be anticompetitive?" Well, yes, Intel, apparently so.
Referring to the huge fine, Sewell said, "the amount is arbitrary. It bears no relationship to any actual or proven harm or injury," fatalistically adding, "But, so be it." Sewell said the firm will take out a bank guarantee for the cash, but would not pay the fine immediately, as the firm is planning to appeal the decision within 60 days.
"We will respect the proper administration of justice within the EC," said Sewell, adding "we will comply with all appropriate measures to secure an undertaking in the amount of the fine, and we will defend ourselves vigorously by appealing this matter to the Court of First Instance."
Sewell also said he couldn't "comfortably" say he understood what Intel was being asked to do by the commission, as the firm had only been provided with a summary of the final decision, and would have to wait for the full version in order to "change business practices accordingly." µ
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Intel has repeatedly refused to act anti-competitively. Whereas most companies would have created proprietary standards, Intel created industry groups for PCI, PCIe, AGP, and loads of other specs. Think about it. Most companies would have just kept the tech and licensed it out, and some companies would have used it to edge out competition.
"Eight years later, our competitor, and the sole complainant in this case is alive, healthy"
If barely keeping head above water and in massive debt counts for a healthy company!
Copying Microsoft's reaction to beign found out. As Neelie says, the answer is simple. If you want to do business in the EU then obey its laws. The US expects foreign business to obey its laws - so do ye likewise.
"Intel has repeatedly refused to act anti-competitively. Whereas most companies would have created proprietary standards, Intel created industry groups for PCI, PCIe, AGP, and loads of other specs. Think about it. Most companies would have just kept the tech and licensed it out, and some companies would have used it to edge out competition."
Um, what planet are you from? Intel has time and time again abused their position in the marketplace. Offering rebates for companies to not use competitor's chips it quite blatantly anti-competitive. Not to mention threats they've made to withhold chipset designs if manufacturers use AMD.
The argument that Intel is some sort of benevolent corporation because they create some open standards is ludicrous. That is incentive for companies to design for your platform. One can see the advantages of this when comparing it to the failure of Sony's proprietary approach.
When AMD was a better alternative to Intel processors (the Athlon 64 vs P4-Prescott era) Intel still dominated the sales and made profit.
But we can explain that now, moreover: I was "victim" of intel policies when I bought my first computer. I wanted the AMD Athlon 700Mhz system, and the guy in the shop offered me the Intel P3 600Mhz as a "better" alternative. They also told me that despite costing like 200$ more and being 100Mhz slower in clock, the P3 600Mhz was still "way faster than the Athlon." He tried to convince me at all costs. He just didn't want to sell me the AMD system.
But at the time, I just bought the AMD because of the price, and when I got the thing, it proved itself that they were lying to me. That thing was just FAST and WAY FASTER than my neighbors own P3 700.
Now, 9 years later, I'm a computer expert and I know right away what I'm buying, I also ensamble the PC myself and do the researchs online. but most of the times, people ignores and just buy the grey box, after all, any new PC today is way enough for common tasks.
B Frank above hit the nail on the head. AMD nearly went completely under, and has never reached its full potential because of Intel's shady practices. Were I an adjudicator in the Court of First Instance, I would actually take this comment in as further evidence of anti-competitive behavior and increase the fine.
Then again, when you understand that the Intel corporate culture has far too many angry and unethical people who would throw their own mothers under the bus, it's no surprise at all that this is happening to their main competitor.
Bat your eyes in innocence all you want Intel, but the truth is you got what you deserve.
With GWB out of office, maybe Intel could actually be found guilty of anticompetetive practices in the US. Maybe.
Intel's responses remind me of the bully from grade school who after getting in trouble would say "But But But he was doing it too! Didn't you see him doing it too!!"
Maybe its just me, but has anyone else noticed that the EU and the state of New York have something to gain from bringing charges against Intel. AMD/Foundry Corp. has its foundries in Germany and New York, which is filing suit is offering money for them to build there.
I don't remember seeing a shortage of AMD based desktop computers in retail stores, or online.
I have however seen some manufactures use Intel exclusively to keep support costs lower. Most people forget that it has only been in the last 3-5 years that AMD chipsets became reliable, and that its support costs were much higher than Intel's.
...between offering incentives to buy Intel and ofering incentives not to sell AMD.
AMD had a hell of a time breaking into the big reseller market for exactly this reason.
I think Intel deserve this. They would do well to just apologise for past misdeeds and compete in an ethical manner in future. All this bluster merely convinces everyone that they have understood nothing.
Apparently we will just have to carry on watching out for these guys!
"Um, what planet are you from? Intel has time and time again abused their position in the marketplace. Offering rebates for companies to not use competitor's chips it quite blatantly anti-competitive. Not to mention threats they've made to withhold chipset designs if manufacturers use AMD."
But they didn't do that (according to Otellini) and if you continue with this assertion he's going to scweam and scweam and scweam (and maybe do a bit of rewriting history at the same time).
Um, Intel, as Realitycheck's post proves, some of us have been about for a while. We've heard your reps spout this crap, which started a little bit before the P4 - try back when we were all overclocking Celeron 300As and trying to get S3 cards to play nicely with 3DFX Voodoos.
As a build manager in the late 90s, I also distinctly remember our senior buyer trying to take me to task for putting a slot A Athlon and MSI board on the BOM for a new budget-performance machine with the excuse "we'll lose our Intel discount." The Athlon was technically superior, cheaper that its Intel equivalent in capability and yet we were stuck churning out slot 1 and socket 370 pre-coppermine celery dregs for the same price. I didn't prevail, needless to say, and said company folded within a couple of months anyway.
Think back. If you were anywhere near middle manglement at that time, you'll recall the evasions about 100MHz FSB for Celerons already castrated by stupidly small levels of cache, the first abysmal i810/Whitney chipsets, topped off with Intel only or you pay more from the salesdroids. This is not new behaviour, at least not here in the UK. It's akin to a certain software house, who shall remain nameless, bullying Fujitsu for having the barefaced cheek to propose installing BeOS as a second OS back when Be had a future (yeah, Haiku, whatever).
Why not fine big banks?
That is the problem the EU Commission has.
The EU Commission provides no hard evidence, no contract that says "exclusive" or "no AMD" etc..
It is all hearsay which the EU Commission likes to "believe" in and base their verdict on.
Ah well, go to any industry show or joint some sales and marketing people during a sales meeting past 10pm at the bar, and you'll hear a lot of that stuff just everywhere regardsless of the industry.
The EU verdict is weak and embarrassing.
Who knows, maybe this verdict makes its way the WTO some day.
In the US, the verdict is not taken well, just look for various commentents / videos on CNBC.
When Athlon first came out motherboard makers were afraid to release motherboards, out of fear of not being able to purchase Intel chipsets, those that did, hid their names and made white-box boards.
AMD had to start this suit because once it started Intel started behaving much better to prove to the world that they did not do the things they were accused of doing. If AMD didn't start the suit, Intel would have continued these strong arm tactics, and Athlon would have died along with AMD.
So sure AMD is still barely alive 8 years later, but if it weren't for the suit, they would have been gone 7 years ago.
Intel have 90 days to pay the fine in full, kerching!
Look at the Intel share price, it's dropping. Look at AMD share price, it's doubled since Febuary.
Read the EU statement in full - you'll find there is evidence. Don't think that the Commission have gone down this road without being able to back it up in court. With regard to WTO, while the US ignores it, when found guilty, why should anybody else pay attention to it on US behalf?
Big deal. It doesn't take much to double one's stock when one's stock is in the toilet to begin with. $4.38 a share (current trading at 4:35 EDT) isn't a stock price to be proud of, even if it doubled since February.
i He also asked the question, "can rebates be anticompetitive?" /i
I love the fake outrage from a lawyer who is pretending like he isn't talking complete nonsense. Here's rebates for dummies:
Not anti-competitive:
"If you buy 1 Intel CPU, mail in the UPC code along with a rebate form, then in 6 weeks, we'll send you a rebate check for $20."
Anti-competitive:
"If you (OEM) use only Intel CPUs in the computers you sell, we will give you a massive rebate. If you sell any AMD CPUs, we will not give you a massive rebate. If you don't take the massive rebate, you won't be able to compete with the OEMs that do take the massive rebate. If you sell any AMD CPUs, it will be very, very bad for your bottom line."
That's how Intel froze AMD out.
Open standards you say? Like soon to be ready USB 3.0? Intel will release for itself first, then hold ransom the rest of the industry for 6 months before releasing the spec... Wow... how altruistic..
Years ago the naive might have believed that Intel un-intentionally violated anti-trust laws for huge financial gain and to eliminate any competitors. You'd be pretty hard pressed based on facts today, to deny that Intel has violated law as often as possible over the past 20 years, to maintain an illegally gotten monopoly.
Intel operates with the same corporate mentality as Microsucks, i.e. they are above the law and unstoppable. Intel ( and Microsucks) really deserve more:
As in a 500 BILLION Euro fine and 20 year prison time for Bill Gates and Otellini and other execs. Their crimes are simply an outrage.
As Daryl touched upon, corporate "rebating" is a means of corruption and shouldn't be tolerated. Everything should be upfront on wholesale purchases where the quantity discounts are immediately given without retroactive discounting based upon terms. They'll have to go back to the old business model of bribing the purchasing agents at the big companies to manipulate loyalties.
People are saying that AMD products were superior at that time and cheaper as well. So why didn't the OEM's, shopkeepers etc. sell AMD only?
Were the rebates so massive that they more than made up for the AMD's performance/price advantage? It's hard to believe. For example, if an AMD system sold for $1000, and an Intel one sold for $1200, and if you sell only Intel you get it for $900. So if you sell AMD it costs $1000 and if you sell Intel only, it costs $900. But still, just for $100 more you're getting superior performance, so isn't it worth it for the OEM's to go AMD-only instead of Intel-only?
Why would OEMs care about faster performance? They're in the business of selling machines for profit, not getting the customer the best for their money.
But I thought people would rather buy $1000 AMD better performing at that time than $900 Intel poorer performing. wouldn't that increase their sales. idk
While I was working for Sony back in late 2001, Sony sold AMD and Intel processors. Then, one day Sony said, 'we're only going to sell P4 processors as they are the best chips out there!' What I heard coming through the grapevine was that Intel came to us, and said that if Sony stopped selling AMD processors they would give us a massive discount on our chip purchases, something in the range of 40%. So the chip cost dropped, but our prices didn't, increasing the bottom line for Sony. What also didn't help sales of AMD processors was that they didn't advertise, you had to find about them by word of mouth basically. And to answer ssj4Gogeta, I think what they were trying to explain was that even though the AMD system is only 100 dollars more sale price wise, based on the discounts they get from Intel, the $900 system would make them more profit. There is no real incentive to sell you the best product for your needs with computers. If there was, we wouldn't see so much shovelware installed on PCs when we buy them, at least that's what I think. But as I have said on many occasions, this is just my opinion. And opinions are like elbows, everyone has one and each is different.